Closing costs are something that must be considered when buying a condo or house, especially because they have been rising across the country in 2010.

However, many buyers, especially those going through the process for the first time, are not even sure what closing costs encompass. Essentially, closing costs are the fees that must be paid for items required by the lender as conditions of the loan. They include the cost of title searches, loan applications, recording the deed, appraisals, credit checks, homeowner’s insurance and mortgage insurance.

The total amount of closing costs vary because they are a percentage of the cost of the property being bought, usually between 3 and 6 percent. Prior to the closing, it is advisable to ask your lender for at least an approximate cost, so you will have an idea what to expect and will come prepared. In some cases, a motivated seller agrees to cover the fees for a cash-strapped buyer, but that doesn’t always happen.

Furthermore, the average mortgage closing costs have been increasing across the country in 2010, according to an online survey by personal finance company Bankrate Inc., which released its findings in August. For instance, the closing costs jumped 40 percent in Illinois in 2010. For instance, the origination and third-party fees on a $200,000 mortgage added up to $3,505 in the 2010 survey, up from $2,486 a year ago.

The story was similar across the United States, which saw, on average, a 36 percent increase in closing costs over 2009 numbers. Bankrate attributed one of the reasons for the increase to the new regulations implemented in January. Lenders now must provide an estimate of title and closing fees within 10 percent of what the final cost will be, or they will risk penalties. The regulations require more labor in getting a loan together, but they are meant to benefit people financing a condo by providing them with as much information as possible before the closing.

In the Bankrate survey, which assessed average closing costs in the 50 states plus Washington, D.C., Illinois ranked as the 43rd most expensive, and moved up to 31st with the increases this year. But still trails behind New York, which was found to be the most expensive, with an average fee of $5,623. The survey excludes property taxes, recording fees, homeowners insurance and prepaid items such as a partial month’s mortgage interest. It also does not include any discount points.

You want a Realtor with excellent negotiating skills to help you get the best deal possible. Because after all, if you have your heart set on buying a condo that you really like, you don’t want closing costs to be a deal-breaker.